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NEWS COVERAGE - FRANCE

ECONOMY AND BUSINESS NEWS FROM THE PAST WEEK


March 27th, 2015
Business Sweden in Paris

FRANCE: PURCHASING POWER ON THE RISE IN 2014,


BREAKING A THREE YEAR NEGATIVE TREND
French households purchasing power slightly increased
by 0.5 % in 2014, caused by following factors, according
to Insee:
1.

Falling energy prices

2.

Low inflation

3.

Lower pressure of taxation

French purchasing power evolution in percent


2,3%

Despite a rising unemployment rate, the sum of gross


salaries increased by 1.5 %

1%
0,6%

How will the purchasing power evolve in 2015?


The forecasts diverge but according to Jean-Baptiste
Pethe, at Exane BNP Paribas, the purchasing power will
grow during 2015

-0,4%

'07

'08

0,5%

-0,4%

'09

'10

'11

-0,6%
-1,5%
'12

'13

'14

However most analysts agree that the increase could be


temporary, an accelerating inflation rate, as a result of
increasing oil prices, would influence the French
purchasing power negatively.

SOURCE: 1
BUSINESS SWEDEN

27 MARCH, 2015

FRANCE: STILL NO SIGN OF RECOVERY IN THE


UNEMPLOYMENT CURVE
The French Government hoped for decreasing unemployment rates two months in a row, which would be a first two
month decrease since Franois Hollande took office.
Deceiving numbers:
The number of registered employment seekers increased by 12,800
Labour force having worked part time seeking full time jobs increased by 30,400

A potential sign of recovery:


Part time jobs increased by 1.2 % compared to January, creating most jobs in the industrial sector (+ 7.6 %),
transports (+ 7.3 %), services (+ 6.9 %) and in the commercial sector (5.3 %)

According to the French Labour Market Minister Franois Rebsamen, the new unemployment report sends out several
positive signals:
1.

The youth unemployment is at its 2013 level, kept relatively low due to subsidized job opportunities called emplois
davenir

2.

The average unemployment increase per month is at its lowest, legitimizing labour market reforms

SOURCES: 2, 3 & 4
BUSINESS SWEDEN

27 MARCH, 2015

FRANCE: THE CONSTRUCTION SECTOR IS PROJECTED


TO CONTINUE ITS STRUGGLE IN 2015
Evolution of new projects in the French
construction sector, in percent
2014

2015E

The number of constructed homes are projected to


amount to 360,000 in 2015, compared to older predicted
numbers of 340,000 new homes
As a result, the decrease in construction of residential
buildings is predicted to decelerate to -3.8 %

The number of job losses in the construction industry is


estimated to 30,000 in 2015

-3,8%

Residential
buildings
Non residential
buildings

-6,4%

Part time construction jobs where destroyed at a rate


of 18.7 % in February 2014

Several tools put in place in an effort to increase the


construction rate:
-9,4%

-10,8%

Le PTZ* , a zero percent interest rate has been


put in place to favour constructions of new homes
for individuals
La Loi Pinel , a law enabling tax reductions for
households investing in new homes

SOURCE: 5 & 6
BUSINESS SWEDEN

*PRT TAUX ZRO


27 MARCH, 2015

EUROPE: RISK OF REMAINING HIGH UNEMPLOYMENT


RATES IN EUROPE AFTER QE PROGRAM BY THE BCE
Risks are that current growth will not be enough to
counter the unemployment rate of 11.2 % in the
Eurozone, according to economists
A report conducted by the ECB, states that that the
the employment rate will most likely stay close to
double figures after BCEs 1tn quantitative easing
program
It is estimated that 9.9 % of the Eurozone population
will remain unemployed in 2017, at a point when the
recovery cycle of the Eurozone is expected to be
complete (see chart)

Economists conclude that the financial crisis in Europe


has permanently destroyed job opportunities, creating a
higher structural unemployment rate than before
A deskilling of the labour force, due to long periods
of unemployment, could hurt the Eurozone in the long
run
SOURCES: 7 & 8
BUSINESS SWEDEN

27 MARCH, 2015

SOURCES
1. Les Echos 22/03/2015, Le pouvoir dachat des Franais repart timidement la hausse,
http://www.lesechos.fr/politique-societe/societe/0204244405633-le-pouvoir-dachat-des-francais-repart-timidement-a-la-hausse-1104256.php
2. Les Echos 26/03/2015, Chmage : coup dur pour le PS avant les lections,
http://www.lesechos.fr/journal20150326/lec1_france/0204254637597-chomage-coup-dur-pour-le-ps-avant-les-elections-1105579.php
3. Prismemploi 25/03/2015, Baromtre Prismemploi lemploi intrimaire en fvrier 2015,
http://www.prismemploi.eu/Public/Page-d-accueil/Presse/Communiques-de-presse/Barometre-Prism-emploi-l-emploi-interimaire-en-fevrier-2015
4. Ministry of Labour, Employment, Vocational Training and Social Dialogue, Prsentation of Emplois davenir,
http://travail-emploi.gouv.fr/emplois-d-avenir,2189/presentation,2259/emplois-d-avenir,2189/rubrique-technique,2193/presentation,2278/presentation,16
015.html
5. Les Echos 26/03/2015, Le secteur du btiment entrevoit le bout du tunnel,
http://www.lesechos.fr/journal20150326/lec1_france/0204254158604-le-secteur-du-batiment-entrevoit-le-bout-du-tunnel-1105602.php
6. Fdration Franaise du Btiment 25/03/2015, Activit du secteur du btiment: prvisions 2015 actualiss,
http://www.ffbatiment.fr/federation-francaise-du-batiment/laffb/actualites/previsions-actualisees-pour-2015.html
7. Financial Times 23/03/2015, Double digit unemployment predicted even if Eurozone recovers,
http://www.ft.com/intl/cms/s/0/e84c4cde-cbfc-11e4-beca-00144feab7de.html?siteedition=intl#axzz3VEDst6im
8. European Central Bank 23/03/2015, March 2015 ECB staff macroeconomic projections for the Euro area,
https://www.ecb.europa.eu/pub/pdf/other/ecbstaffprojections201503.en.pdf?7385bf4f8a3f4021928e832362e3da8e

BUSINESS SWEDEN

27 MARCH, 2015